Marijuana’s Catch-22: Is There No Way for Cannabis to Succeed?

By most accounts, the marijuana industry is growing like a weed. Since California became the first state to legalize medical cannabis in 1996, two dozen additional states have also legalized medical pot, and four states — Colorado, Washington, Oregon, and Alaska — along with Washington, D.C., have legalized the sale of recreational marijuana.

This is pretty exceptional considering that public support for the nationwide legalization of marijuana stood at just 36% in 2005. Today, according to Gallup’s most recent poll, 60% of Americans approve of the idea of fully legalizing marijuana.

The industry and state governments appear to be benefiting, as well. A recently released financial report from Cowen & Co. estimated that legal pot sales are currently worth $6 billion, with the investment bank predicting that legal sales could explode to $50 billion by 2026. For you math-phobic people, that’s a compounded annual growth rate of nearly 24% over the next decade.

In Colorado, the government wound up adding $135 million in marijuana tax and licensing revenue to its coffers in 2015, with sales of legal weed topping $1 billion on a trailing 12-month basis. Looking ahead, the November elections will feature nine states voting on a marijuana initiative, five of which are looking to legalize recreational pot.

California, one of the five states voting on recreational cannabis, is of particular importance because the state itself represents the eighth-largest GDP in the world. If approved, California could generate approximately $1 billion in extra revenue per year thanks to recreational marijuana tax revenue.